Il Nuovo Postiglione - Worry, confusion as Vietnam slashes public jobs

Across Vietnam, confused public sector workers have been left reeling as ministries are scrapped and merged in a drastic attempt to slash billions of dollars from spending.

The ruling Communist Party aims to cut one in five public sector jobs, many of which were seen as secure positions for life.

Some employees are waiting to hear if their position will go, while others have been given less than 24 hours to decide to fight for their post or take early retirement.

The reforms, which mirror US President Donald Trump's push to take a hatchet to government spending, are creating unease in a communist country where working for the state is seen as a cradle-to-grave social safety net.

The shake-up has been described as "a revolution" by senior officials, and will see the number of government ministries and agencies slashed from 30 to 22.

The ministries of transport, planning and investment, communications and labour have been abolished, and state media, the civil service, police and military all face cuts.

Linh, a pseudonym to protect his identity, works for one of the newly merged ministries and said he had chosen early retirement "to escape the complicated political environment".

"I think I am fit to continue my work and I still have experience that I can share with other staff," the 54-year-old told AFP. "But I have made the right decision."

"Although I support this streamlining drive, things have progressed so fast and unpredictably," he said.

Linh will receive around $100,000 when he leaves, but others who have lost their jobs are anxiously awaiting news of compensation.

Several journalists working for state media told AFP they were laid off with little notice, with one saying he had turned to driving a taxi after his 12-year career as a TV producer was suddenly terminated last month.

- 'Human costs' -

Almost two million people worked in Vietnam's public sector as of 2022, according to the government, although the International Labour Organization puts the figure much higher.

One in five of these jobs will get the chop over the next five years.

The government has said that 100,000 people will be made redundant or offered early retirement, but it has yet to explain how it will reach the much larger target.

"There are real human costs to these pushes for efficiency," said Zachary Abuza, a Southeast Asian politics expert at the National War College in Washington, DC, explaining it was not clear if the private sector could absorb them all.

"Think about the state media folks. It's not like there's a robust private media for them to move into," he added, referencing the fact that all media in Vietnam, a one-party state, is government controlled.

Even for those who stay, like Le Thu Thuy, an administrator in another newly merged government ministry, there is huge uncertainty.

Before the reorganisation of the ministry becomes clear, "we will have so many bosses and staff", the 52-year-old said.

"What are they all going to do here?"

- 'Sizeable war chest' -

Building on stellar economic growth of 7.1 percent in 2024, Vietnam -- a global manufacturing hub heavily reliant on exports -- is aiming for eight percent this year.

But a bloated bureaucracy is seen as a brake on growth, as is a high-profile anti-corruption campaign that has slowed everyday transactions.

Authorities say savings from the cuts in spending could total $4.5 billion (113 trillion dong) over the next five years, despite costs of more than $5 billion for retirement and severance packages.

Abuza said the government could dip into a "sizeable war chest" built up through exports and foreign exchange reserves.

"They can do this without causing too much financial harm," he told AFP, "and I think they're assuming that they will be rewarded with further investment down the line".

The anti-graft campaign has swept up dozens of business leaders and senior government figures, threatening the country's reputation for stability.

There are fears the bureaucratic reforms could also cause short-term disruption, although the foreign affairs ministry denied the investment and business environment would be affected.

Among those not directly impacted, the reaction was mixed. Some welcomed the move to create a better business environment, but others described the reforms as chaotic and urged caution.

"Ideally, there should be a small-scale pilot," an 85-year-old army veteran, who declined to be named, told AFP, adding it should be gradually expanded "only when it shows positive results".

"I joined the army in 1958 to unite this country," the veteran said.

"No-one expected the liberation would lead to the chaos of this situation today."

E.Accardi--INP